Stocks rose from the open on Tuesday, then built on the momentum as investors sifted through mostly encouraging quarterly results. Whirlpool, AutoNation and engine-maker Cummins all rose 7% after reporting their results.
NEW YORK (AP) — Strong corporate earnings pushed up stocks across industries on Tuesday, with the energy sector and small companies leading the gains.
Stocks rose from the open, then built on the momentum as investors sifted through mostly encouraging quarterly results. Whirlpool, AutoNation and engine-maker Cummins all rose 7 percent after reporting their results.
The surge in stocks in recent days is a turnaround from Oct. 15, when the Standard and Poor’s 500 closed just short of a “correction,” defined as a drop of 10 percent or more from a recent high. With the gains on Tuesday, the index has nearly erased all those losses.
“Here we are just two weeks later, and we’ve just about gained it back,” said Scott Wren, a stock strategist at Wells Fargo Advisors. “We think it’s still going up.”
Investors were cheered also by news that a key gauge of U.S. consumer confidence rebounded strongly in October. The Conference Board reported that its confidence index hit a seven-year high as solid job gains raised expectations for economic growth, an encouraging sign for retailers as they head into the holiday shopping season.
“We’re predicting Christmas is going to be very strong,” said Phil Orlando, chief equity strategist at Federated Investments. “Stocks are cheap right now.”
The S&P 500 rose 23.42 points, or 1.2 percent, to 1,985.05. That puts it another strong day from it a record high. It’s now just 26.31 points short of its Sept. 18 record close of 2,011.36.
All ten industry groups in the index rose, led by a 2.3 percent gain in energy stocks.
The Dow Jones industrial average rose 187.81 points, or 1.1 percent, to 17,005.75. The Nasdaq composite climbed 78.36 points, or 1.8 percent, to 4,564.29.
The biggest gain was in the Russell 2000, a small stock index. It jumped 2.9 percent.
In other economic news, orders to U.S. companies for long-lasting manufactured goods fell for a second month in September, a government report showed. Orders have jumped around in recent months due to moves in the volatile category of aircraft orders.
Homebuilders rose following news that U.S. home prices grew in August, albeit at a more modest pace. The Standard & Poor’s/Case-Shiller 20-city home price index rose 5.6 percent in August from 12 months earlier. Home prices were rising at a double-digit pace as recently as last fall. Meritage Homes rose 84 cents, or 2.2 percent, to $38.60.
Investors are now looking ahead to Wednesday’s announcement from the Federal Reserve’s policymaking committee for insight into when the central bank might start raising interest rates. The Fed is winding down its $4 trillion bond-buying program, which is known as quantitative easing. There is heightening concern about whether the U.S. economy is strong enough to sustain growth without that support.
Among other stocks making big moves Tuesday:
– Amgen rose 6 percent after it announced plans to cut more jobs, buy back $2 billion worth of stock and raise its dividend by 30 percent. That followed news Monday that third-quarter adjusted earnings and revenue for the world’s biggest biotech drugmaker topped Wall Street’s expectations. The stock rose $8.99 to $157.19.
– Madison Square Garden Co. surged 11 percent after the company said it’s considering a plan to split off its entertainment businesses from its media and sports divisions. The stock rose $7.21 to $72.99.
– Twitter reported third-quarter revenue late Monday that outpaced expectations, but investors are worried about revenue for the last three months of the year and growth in the number of users. The stock plummeted $4.78 to $43.78, a loss of 10 percent.
The price of oil rose as rising consumer confidence led investors to anticipate greater demand for energy.
U.S. crude rose 42 cents to $81.42 a barrel in New York. That helped push up energy stocks 2.3 percent, the biggest gain among the 10 industry groups in the S&P 500. Crude has dropped sharply since June, when it went as high as $107 a barrel.
Brent crude, a benchmark for international oils used by many U.S. refineries, rose 20 cents to close at $86.03 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the NYMEX, wholesale gasoline rose 2.6 cents to close at $2.196 a gallon, heating oil rose 1.8 cents to close at $2.493 a gallon and natural gas rose 8.8 cents to close at $3.649 per 1,000 cubic feet.
In bond trading, the price of the 10-year Treasury note fell slightly. The yield, which moves in the opposite direction, rose to 2.29 percent from 2.26 percent late Monday.
The price of gold edged up 10 cents to $1,229.40 an ounce, silver rose six cents to $17.23 an ounce and copper rose three cents to $3.09 a pound.